VW: Factory Closures Becoming Concrete

Challenging situation for VW: While electric vehicle sales in Europe are stalling, combustion engine sales in China are plummeting. This is why Volkswagen and partner SAIC are considering closing a plant in Nanjing, China. Nio is reportedly interested in the Audi plant in Brussels, which is no longer in use. In the USA, VW has to pause the production of the ID.4.

All markets are developing differently – unfortunately at a rather subdued level

The crux: All markets are developing differently: In China, for the first time, more "New Energy Vehicles" – these are electric cars and plug-in hybrids – were sold in July than combustion engines. Unfortunately, Volkswagen in China delivered the strong figures: In 2018, thanks to the China joint ventures with FAW and SAIC, an operating profit of over 4.6 billion euros was recorded, while in the first half of 2024, less than one billion euros remained. Due to the declining demand for combustion engines, the Passat is now to be moved from Nanjing to a nearby factory, according to the news agency Reuters. Volkswagen has not commented on the report so far. Already in 2023, SAIC-VW sold 1.2 million vehicles, 43 percent less than in 2017. But VW is not the only brand with which partner SAIC has concerns: GM brands Chevrolet and Buick are also massively regressing.

Insiders reportedly mentioned as early as spring 2024 that SAIC is considering cutting thousands of jobs in its joint ventures with Volkswagen and General Motors. To counter this, SAIC and VW are also considering strengthening Skoda, according to the Reuters report. The problem: Skoda is strong in India but weak in China. Currently, the brand only accounts for one percent of the volume of SAIC-VW. In 2017, it was still 17 percent. There was even talk at one point about pulling Skoda out of China altogether.

Nio could take over the Audi plant in Brussels

There is hope for the workers in Brussels: According to the Belgian newspaper "De Tijd," Nio is one of the candidates for taking over the plant. A delegation from Nio reportedly visited the Audi plant in Brussels in recent weeks and is now working on an offer that is to be submitted to the Volkswagen Group by September 23. Nio would need an assembly plant in Europe due to impending tariffs, for which the Audi plant in Brussels could be suitable as production of the Q8 e-tron is coming to an end soon. Its successor will come from Mexico. Brussels is a small plant with 2,910 employees – and would be the right size for Nio.